UK house prices dip more than forecast in January - RICS survey

LONDON

An apartment block is pictured in central London May 9, 2011.

Reuters/Luke MacGregor

LONDON (Reuters) - British house prices fell faster than expected in January, partly because bad weather discouraged viewings, but prices are likely to pick up later in the year, a survey showed on Tuesday.

The Royal Institution of Chartered Surveyors' (RICS) seasonally adjusted house price balance dropped to -4 in January from a slightly downwardly revised -1 in December. The reading fell short of economists' forecasts for -2 but still pointed to broadly stable prices.

Although property professionals predicted little change in house prices in the next three months, the non-seasonally adjusted balance measuring their forecasts for the next 12 months jumped to +18 from +5.

"While it is still very early days to talk about a comprehensive market recovery, activity levels are still encouraging and there is some optimism out there that things could continue to improve," said Peter Bolton King, RICS global residential director.

In London, prices climbed at the fastest pace since May 2010, while in Wales they grew for the first time since early that year, RICS said.

Overall in Britain, house sales rose last month, supported by falling mortgage interest rates, it added.

Bank of England data released on Monday showed sharp falls in fixed mortgage rates in January, likely helped by the central bank's Funding for Lending Scheme, which provides cheap funding to banks to encourage them to lend.